DraftKings has initiated a significant expansion beyond conventional sports wagering with the introduction of its new app, DraftKings Predictions, marking its foray into the regulated prediction markets across the United States. This development, announced on December 22, 2025, reflects the company’s strategic entry into a rapidly expanding sector, utilizing a unique regulatory framework governed by the Commodity Futures Trading Commission (CFTC) instead of state gaming authorities. This arrangement enables DraftKings to offer event-based contracts in 38 states, including key jurisdictions where online sports betting remains prohibited.
The DraftKings Predictions app diverges from the traditional sportsbook model, functioning more akin to a trading platform. It allows users to engage in trading contracts based on the outcomes of real-world events, initially available in categories such as sports and financial markets, with plans to expand into entertainment and cultural outcomes. Users select binary yes-or-no outcomes related to specific events and decide their level of financial commitment per contract, while DraftKings acts as an intermediary, routing trades through regulated exchanges without setting odds individually.
Currently, these trades are facilitated through an exchange operated by the CME Group, granting DraftKings immediate integration with established market frameworks and regulatory oversight. The company anticipates expanding this model over the coming months, leveraging its recent acquisition of Railbird Technologies—a registered prediction exchange—to enhance its operational capabilities. By linking with multiple exchanges, DraftKings aims to broaden the scope of available contracts and exert greater influence over pricing strategies, product design, and financial planning.
In stepping into the prediction market, DraftKings encounters competition from established players like Kalshi, known for offering sports contracts outside the conventional gambling landscape. These platforms have piqued the interest of state regulators and sports leagues due to concerns that prediction markets may resemble unlicensed betting operations and potentially compromise consumer protection standards. In response, DraftKings has fortified its existing responsible gaming measures within the Predictions app, enabling users to impose spending limits, take breaks, or self-exclude if necessary. Additionally, the app provides educational resources to elucidate the mechanics of event contracts, reinforcing responsible engagement with the platform.
From a commercial perspective, DraftKings Predictions presents a strategic opportunity to penetrate markets where it cannot operate a sportsbook. Although sports contracts remain confined to certain states, financial market offerings have a broader geographic reach, potentially expanding DraftKings’ customer base without infringing upon current gaming licenses. This launch coincides with ongoing debates regarding the impact of prediction markets on traditional sports betting, with some questioning whether they will complement or disrupt existing models.
For DraftKings, the venture into prediction markets represents a calculated approach, leveraging its established technology and brand recognition to explore a new domain while maintaining the sportsbook as its core business focus. As the prediction market landscape evolves, the company’s cautious strategy positions it to navigate regulatory complexities and competitive pressures effectively.
Looking ahead, DraftKings plans to monitor the performance of the Predictions app closely and adapt its strategy in response to market feedback and regulatory developments. The integration of Railbird Technologies is expected to enhance operational efficiencies and broaden the range of contracts available to users. As the prediction market continues to mature, industry stakeholders will be watching closely to assess the implications for both traditional and emerging betting sectors.
